Input credit on freight charges

This query is : Resolved

Rubul (Querist)
Follow

24 August 2015 We are trader of cell phones and also provide repairing services(our output service) of cell phone. We use courier services for dispatch and delivery of goods. Many clients sent us cell phone for repairing purpose and after repairing phones are also dispatched through courier service.
Untill last year we are claiming input credit of service tax charged by courier co. on their freight bill. This year our CA told us that we can’t take input credit of freight bill since our service is repairing of cellphone and it is in no way relates to our output service.
While my contention is that we do use freight service for providing output service as we are using courier service facility to dispatch repaired goods back to our client. At this my CA’s contention is that majority of amount charged by the courier co. in his bill is for trading goods dispatched to clients and not for repaired goods dispatched (which I agree). As per my CA we are eligible for input credit of freight bill’s service tax on pro-rata basis for repaired goods only.
While as per me it is nowhere written in CCR-2004 that “input credit is available only if input service is used entirely for output service or in case part use of input service, credit is available on pro-basis”. His words are entirely logical and not in legal context. Please confirm me if I am wrong or right in my interpretation also please cite any case law or supporting for your answer.

Rubul

Rubul (Querist)
Follow

26 August 2015 I got my answer. Rule 6 of CCR 2004 mandates for proportionate claim of input credit.
But stil I have one more request if members could help. Can you provide me original text of Rule 6(3D) of CCR 2004

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now